V-Mart To Acquire Fashion Marketplace LimeRoad In A Distress Sale

V-Mart Retail To Acquire Fashion Marketplace LimeRoad For INR 31.12 Cr

SUMMARY

As part of the deal, V-Mart would acquire LimeRoad’s assets worth about INR 14.61 Cr and assume its current liabilities of INR 36.26 Cr

V-Mart also plans to make a total investment of INR 150 Cr to help the startup scale further and achieve sustained profitability

The acquisition will help V-Mart acquire digital-first millennials and further build its omnichannel expertise, the fashion retailer said

Fashion retailer V-Mart Retail on Monday (October 17) said it would acquire Tiger Global-backed ecommerce startup LimeRoad in an all-cash deal of INR 31.12 Cr on a slump basis.

As part of the deal, V-Mart would acquire the fashion marketplace’s assets worth about INR 14.61 Cr and assume its current liabilities of INR 36.26 Cr.

Given the underlying strong unit economics of LimeRoad, V-Mart plans to make a total investment of INR 150 Cr to help the startup scale further and achieve sustained profitability, the fashion retailer said in a release.

“With this acquisition, we aim to not only acquire digital first millennials but build our omnichannel expertise,” said Lalit Agarwal, managing director of V-Mart Retail.

Founded in 2012, LimeRoad claims to sell its fashion products to 17 Mn buyers. The startup claims to deliver gross merchandise value (GMV) of more than INR 700 Cr at consistently strong contribution margins after marketing costs.

Over the years, it raised close to $50 Mn from investors such as Lightspeed Venture Partners, Matrix Partners India and Tiger Global Management.

The fashion marketplace reported total revenue of INR 69.31 Cr in FY22, a decline of 13% INR 79.64 Cr in FY21 and 61.5% from INR 179.95 Cr in FY20.

Founded in 2002, V-Mart is an omni-retail store chain offering fashion apparel, footwear, home furnishings, general merchandise and kirana. The company serves its digital-first customers through its D2C omnichannel platform vmartretail.com.

V-Mart will operate LimeRoad as an independent business unit, retaining its tech start-up culture, the statement said.

V-Mart is looking for LimeRoad to fundamentally solve the trust and quality issues for its online customers and work with the former’s expertise to translate emerging trends into product depth. The emerging trends, together with LimeRoad’s community expertise, will transform V-Mart stores into rich local-experience centres, driving higher repeat footfall over time, it added.

Following the acquisition, LimeRoad founder Suchi Mukherjee will join V-Mart’s leadership team as CEO of LimeRoad and the omnichannel business, while Ankush Mehra, cofounder of LimeRoad, will continue as the startup’s COO.

V-Mart’s shares fell 0.7% on the BSE on Monday to INR 2,744.35.

LimeRoad competes with the likes of Amazon, Myntra, Meesho, and Nykaa in the online fashion market in the country. As per an Inc42 analysis, the overall ecommerce market is expected to witness a total market opportunity of $400 Bn by 2030, growing at a compound annual growth rate (CAGR) of 18.9% between 2022 and 2030.